Director Of Korea Institute Of Finance: Custody In Crypto Is Crucial

The director of the Korea Institute of Finance, Gong-Pil Choi, pointed out that crypto custody is crucial in improving and facilitating the growth of the market but also for eliminating the hacking fears that are always hovering around the market, according to the latest crypto news.

The Korea Institute of Finance works with the government in order to research and to assess the financial policies and to improve the financial sector of the country. The agency made clear that the management of public keys to access cryptocurrency wallets is really difficult for regular investors.

Asset managers provide custody of traditional assets simply because of the risk that is involved in maintaining ownership over a certain asset. Director Choi explained:

‘’Cryptocurrency exchanges are risky due to hacking fears and the storage of private keys can be burdensome for investors, as in the case of theft, it can cause trouble. Even the traditional financial sector has seen the establishment of the custody market. Cryptocurrencies are more risky than traditional assets and the custody market in crypto will become a rapidly growing market.’’

Despite the ban in China, many crypto custodians got strong support from local venture capital firms such as the startup based in Shanghai that debuted to provide custodian services to crypto trading platforms. The CEO of the startup, Kenneth Xu said that the demand for institutional custodian services is increasing in Asia. He explained:

‘’If an asset manager that oversees $1 billion puts 1 percent of its capital in crypto, that’s already a big amount. These institutions can only enter the crypto market if there are tools to hedge and protect their investments. A strong infrastructure for large-scale institutional investors has to be established.’’